GETTING INSIDE THE ASHANTI LAWSUIT

Ashanti Leaves A Scar on the Music Biz
==================================

Why The $2.6 Million Royalty Dispute Will Have an

Impact on Every Producer/Artist Relationship Big and Small.

By Moses Avalon

It started out oh so innocently in 1997. Genard Parker, an emerging producer, completed the first demos for an unknown 16 year-old artist, Ashanti Douglas through his small Atlanta-based production company, T.E.A.M Entertainment. He paid for them out of his pocket as a favor to her mother, Tina, whom he was dating. Men do all kinds of things to impress women. But they also know that business is business. He had Ashanti sign a contract with Tina–Ashanti’s Mother–as guardian. Ten years later, Parker was suing the multi-platinum “hip hop princess” for $2.6 Million in Federal court claiming he had not been acknowledged in any way for Ashanti’s success. I was his key Expert Witness.

The case settled quietly and with little media fanfare. The reason: part of the settlement terms required lawyers on both sides to refrain from speaking to reporters except to say, “We are very pleased.”

Aside from the fact that stifling the verbosity of lawyers is probably a pubic service, the reality I observed was that neither side was anything close to “pleased” with the result. Nor was I. These events, filled with sex, lies, ego and greed, created case law that will impact producers and artists at all levels in odd, annoying ways for many years to come. This is especially true when one considers that emerging artists and producers sign sloppily drafted spec-deals that pay on the back end without considering that it might wind up costing far more than if they just paid for each other’s services up front. Here is the inside skinny on what can and did go wrong at the super-star level.

IT ALL STARTS WITH A FAVOR

Within a few months after Parker completed his demos, a Sony affiliated production company, Noontime, heard them and wanted to sign Ashanti. Excited by the prospects, Tina asked Parker, as a favor, to release her daughter from their deal so she could trade up to Noontime, which had name-brand producers and a healthy hit-making track-record. She offered Parker a “go-away” package that included a percentage of the royalties on Ashanti’s future “Noontime recordings.” Being his girlfriend there were probably a few other perks. Ashanti left T.E.A.M. and took a six-figure advance from Noontime for recording several songs. But shortly thereafter, Ashantis bailed on them too. This time her trade-up was a keeper: Irv Gotti, and Murder Inc.

With a combination of Noontime’s demos and his own, Gotti (who was not yet the star producer he was to become) got her a deal on Universal Music. The rest is history. She went on to sell an astounding six-plus million units and won a Grammy. She was all of 19. Yet, despite the millions paid to her in royalties, Parker never got a dime, or an once of credit for his role in the process.

He eventually tired from years of Tina’s promises and filed a lawsuit claiming $600,000 in back royalties and another million or so in lost wages from not receiving the credit he felt he deserved. To pay his lawyers, Parker sold his old Ashanti demos to a foreign label for a few grand; the ones featuring her performance without the benefit of well… more experience in the studio, we’ll say. Ashanti filed a counter-suit for releasing of the old demos. It was war.

WHO OWE WHAT

Now, it’s probable that Ashanti and Tina believed that they didn’t owe Parker. How many times do rising artists leave former producers in the dust? More often then not. Plus, in this case, the contract specified remuneration only from “Noontime recordings.” None were released. This seemed like a legal no-brainer. No matter, Parker’s legal team had a brilliant legal theory to get Parker paid.

If Noontime dropped Ashanti after using reasonable efforts to get her a record deal—so be it. No money for Parker. But, if she “quit” Noontime before they had a chance to get her a deal, then quitting should not mitigate her obligations to Parker. Otherwise, every artist could weasel out of paying their original producer—who contributes the most risk capital—simply by quitting their next deal.

This unique argument, if successful, could impact the entire artist development business. Many artists leap-frog producers as they climb the ladder, often leaving a wake of fledglings with little more than “I knew her when” bragging rights. But, what if quitting a go-no-where production deal meant artists were still indebted to their past producer(s)? Parker’s recordings lead to Noontime. Noontime lead to Murder Inc. and millions in sales. Was there a financial link? Did Ashanti owe Parker even though his recordings were only demos that never saw the inside of a record store and never heard by the UNI executives who signed Ashanti?

Lawyers and judges laughed at first. But to everyone’s surprise, the jury agreed with this theory and based on Ashanti’s royalty statements awarded Parker $630,000. They confirmed that if the law rewarded Ashanti for skipping around town then future artists would be free to set up intermediate proxy companies just to facilitate severance from the person who put up the risk capital. Who then would ever invest in a new artist? (And we thought juries were unsophisticated.)

Unfortunately, Parker would end up seeing only a fraction of the $630 K because another sloppy but common practice in the music business reared its ugly head. Pay attention…

MO KNOWS

Shocked at the jury’s award, the judge reduced the amount to $50,000—Parker’s out of pocket expenses. For the back royalties, he said Parker’s lawyers failed to show that the theoretical Noontime/Sony album would have achieved the same results as the albums actually released through Murder/Universal. To get the other $600,000, Parker would now have to prove an odd hypothetical in a new trial: that had Ashanti stayed with Noontime/Sony she would have sold at least the same number of albums.

Here’s where I came in. Parker hired new lawyers,Latif Doman and Daryl Davis who in turn hired me to come up with an argument. I looked at sales reports from several of the top female R&B singers on both Sony and Universal that were marketed in the same time-frame: 2001-2004.

What I discovered surprised everyone; artists of like type on Sony sold an astounding 270% more albums during those years. It could then be argued, if Ashanti was distributed by Sony, she likely would have sold about three times the volume of albums just as other Sony artists of her genre (Beyonce, Alicia Keys and Jennifer Lopez). Parker could be entitled to over $1.7 Million in damages by this logic. This testimony would be devastating to Ashanti’s case.

Despite the fact that Sony and Universal are essentially the Coke and Pepsi of the record business, Ashanti’s lawyers, Alan Kaminskyand Bill Archer would, in order to invalidate my theory, try to argue the exact opposite— that the two companies are vastly different and incomparable. They would need to convince the court that just because Ashanti sold millions on one label does not mean that she would have sold millions on a competing label, even through the competing label’s track record is about three times better.

Just one problem: they were unable to find a music business expert who would support this position under oath. They managed to scrape up and pay a few former Sony executives to say that Sony didn’t think Ashanti had the goods and that is why they didn’t pick up her Noontime deal in the first place. But that testimony was deemed irrelevant and inadmissible by the judge.

Without witnesses, Ashanti’s counsel would have to hope the jury would ignore my empirical testimony in favor of being star-stuck by Ashanti’s appearance in court; a strategy that has worked in other celebrity cases. Unfortunately for them, several of the jurors were involved with music professionally and probably not fans of over-produced or ultra polished pop acts. One was a studio owner, who was more likely to be sympathetic to Parker. Kaminsky & Archer needed an ace in the hole to keep me off the stand.

Minutes before I was to testify, they played one.

THE DOG ATE MY COMPANY

It turned out Parker, like many other small to mid-sized producers, had never properly incorporated. In Parker’s case, he had a service–whom he paid and had a receipt from–file the corporate papers. But they never did. In most states, Parker’s entire award would be tossed on this technicality.

Although this was a tough bit of bad luck for Parker, the reality is that few home-grown production “companies” go though the trouble of even trying to file for a proper business license. The time and expense required, the annual fees and filing quarterly tax forms is a bit much for many who are just starting out. Most just do a DBA for about $100. But this provides no real layer of corporate protection. Without a corporate entity Parker would be personally libel if he lost the counter-suit.

With the Achilles heel in Parker’s case exposed his only leverage was my testimony. Armed with that and the fact that neither side was in a position to gamble on a trial, they settled on the court house steps. Parker got money, but a number far south of what a verdict could have brought him. Considering his recordings were just demos it’s still not a bad pay-day.

Is there a lesson here? I suppose you could dub in the old morals: there is no free lunch; a free demo is rarely free–especially if you become a star. We’ve heard it all before. In this case, using a cheap filing service cost Parker about one million dollars (that’s $330,000 in contingency fees for the lawyers out there). And a free demo cost Ashanti & Tina far more than if they had just paid Parker for them out of their milk money. Life would be a whole lot easier if we all just did the right thing.

Another breach of contract suit awaits the hip hop princess from her former manager, Linda Berk, who claims she’s owed millions in back commissions after helping Ashanti become a star.

2 Responses to “GETTING INSIDE THE ASHANTI LAWSUIT”

I think Ashanti is a very gifted singer, writer and actress i feel like she is very underrated….and people need to give her a try and stop being followers I love her songs and her style …..and i wish her and Nelly the best in personal and their careers!